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Buying a Car Out of State – Beware of Lemons

  Norman Taylor & Associates
  May 14, 2010

In these tough economic times the cost of buying, insuring and maintaining a new vehicle can become prohibitive. One way consumers have found to save on the cost of a new car is to buy the vehicle out of state to avoid the sales tax. This practice does have a major drawback since the California lemon law applies only to vehicles purchased within the state.

California’s Song-Beverly Consumer Warranty Act of 1970 was the first milestone in consumer protection and it is one of the best in the United States. Under this act, manufacturers were only entitled to a reasonable number of attempts to repair defective consumer goods. If unsuccessful, they were compelled to either replace the goods or refund the purchase price. The legislation also made it economically viable for consumers to bring warranty suits by providing for an award of attorney’s fees. The Song-Beverly Act became the model for nearly all the lemon laws that followed in other states.

California led the way once again in 1982 with the Tanner Consumer Protection Act, which specifically defined guidelines for a “reasonable number of repair attempts,” and again in 1991 with the Automotive Consumer Notification Act, which was meant to reduce what is known as “lemon laundering” (the practice of reselling lemons to unsuspecting car buyers).

There is however, a double-edged requirement to these consumer protection laws – most states require the vehicle to be purchased in that state and the owner filing a claim to be a resident in that state (CA does not require residency). So if you buy a car out of state to save the sales tax, you might end up with no protection at all should the vehicle turn out to be defective. The vehicle warranty will of course apply, but you may not be entitled to a replacement or refund if the manufacturer or dealer is unable to permanently resolve the problem with your vehicle.

“It is definitely no fun being on the receiving end when manufacturers and their dealerships do not take responsibility for defects in the cars they sell, even though they know the defects exist,” said Norman Taylor, a leading California lemon law attorney. “The law is an attempt to put you in the driver’s seat, but you have to fulfill the requirements of the law to benefit.”

If you are a California resident and you are driving a lemon purchased in this state, the law is squarely behind you. Contact a qualified lemon law attorney right away.

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